Next Tax Hike for the Rich: Switzerland

By Robert Frank

Switzerland used to be the ideal refuge for the rich: great skiing; picturesque lakeside mansions; airtight bank-secrecy laws; and low taxes. It has long had the highest concentration of millionaires and billionaires in Europe.

Associated Press

Switzerland still has that great skiing and big villas. But its bank-secrecy laws are being pried open by foreign governments (i.e., the U.S. and Germany). And now it may be raising taxes on the rich.

Swiss voters on Nov. 28 will decide whether to introduce a uniform tax across all of the country’s 26 Cantons, or states. Currently, the Cantons set their own rates, and they have been in a race to the bottom to attract more rich people and businesses.

The new levy would be 22% on income above 250,000 Swiss francs ($252,000) and 0.5% on assets above two million francs.

Some business leaders say the uniform tax will chase out business and cost jobs (sound familiar?).

Alfred Schindler, the billionaire chairman of the elevator company that bears his name, told the SonntagsZeitung newspaper that “this expropriation is in intolerable.” He added that he would move abroad if the tax is passed. “Switzerland is becoming socialist,” he said.

As if to prove his point, Swiss Paliamentarian Margret Kiener Nellen said the vote is needed to express voter anger over large wealth. “People are sick of the wheeler-dealers and the super rich,” she told Reuters. As for Mr. Schindler, she said: “I don’t think Schindler will leave. It is an empty threat. Where would he move to? He could go to Monaco, but he could have done that years ago.”

Polls show a close vote, with a slight majority favoring a yes vote. But the “no” vote is rising in the wake of an “vote no” ad campaign from business groups (calling Steve Ballmer).

Whatever the outcome, the proposal shows how the drive to raise taxes on the wealthy isn’t just a U.S. phenomenon. As inequality and outrage over the rich goes global, and developed countries need cash to pay for social services, raising taxes on the wealthy will spread throughout the world.

Comments (5 of 23)

Switzerland’s voters rejected a proposal to increase taxes for the nation’s top earners, following the recommendations of most national leaders.

In a referendum today, 59 percent of voters turned down the proposal by the Social Democrats to enact minimum taxes on income and wealth. Residents would have paid taxes of at least 22 percent on annual income above 250,000 francs ($249,000), according to the proposed changes.

Switzerland’s executive and parliamentary branches had rejected the proposal, saying it would interfere with the cantons’ tax-autonomy regulations. The changes would also damage the nation’s attractiveness, the government, led by President Doris Leuthard, said before the vote.

The Alpine country’s reputation as a low-tax refuge has attracted bankers and entrepreneurs such as Ingvar Kamprad, the Swedish founder of Ikea AB furniture stores, and members of the Brenninkmeijer family, who owns retailer C&A Group.

Heil Socialism ! And to think just 15 - 20 years ago we thought the cradle to grave mentality was dead?
21st Century Robin' of the Hood educational product = envy of those who achieve to those who are lazy.

10:14 pm November 20, 2010

TiredOfFlippingTheBill wrote :

The issue is not taxes -- the issue is that the US federal and state governments are spending much more than they are taking in. They need to learn to live on a budget like the rest of us. The proverbial bar tab is due -- it is time to step up and do something. Kris -- we have to stop living a Mercedes lifestyle when we only have a Kia budget. This is why numerous couple friends of ours have left the US -- paid taxes due and gave up their citizenship -- the only outcome they could see was not good.

I would love to pay the same tax rate as everyone else in the US. Remember that 47% of the US taxpaying public paid NO federal income tax in 2009. Something like 30% of all workers now work for the government -- federal, state, county, etc. This means that a very small percentage of the population is pretty much paying the lions share of everything. (yes I know that everyone pays fuel tax, etc)

6:19 pm November 19, 2010

Ugly Truth wrote :

After taxes go up everywhere in the world, the rich will colonize the moon to escape.

Just you wait governments! Tax us and you'll be sorry!

Yeah right, guys. How dumb do you think we are?

5:51 pm November 19, 2010

kris columbus wrote :

If taxes go up everywhere, then the incentives for the rich to move go away and they will finally be fairly taxed. Someone has to pay the bills, and I for one do not relish the idea of beggars on the streets and senior citizens going back to eating dog food. I would be happier if after all taxes are paid I paid less than half my income, but someone has to pay the bills, and income tax is much fairer than property or asset taxes. Luxury consumption taxes are fairest of all, but there is no stomach for them in this sad country.....

About The Wealth Report

The Wealth Report is a daily blog focused on the culture and economy of the wealthy. It is written by Robert Frank, a senior writer for the Wall Street Journal and author of the newly released book “THE HIGH-BETA RICH.”